Philippines to Launch Wholesale CBDC Within 2 Years

CBDC wholesale is set to be launched in Philippines in the next 2 years by Eli Remolona to address concerns such as bank runs.

Eli Remolona, the Governor of the Bangko Sentral ng Pilipinas (BSP) has disclosed that the central bank intends to launch a wholesale central bank digital currency (CBDC) over the next several years. On February 12, Remolona gave an interview to a local newspaper called Inquirer.net, in which he detailed the specifics of the BSP’s proposal to build a CBDC for the publication.

“Other central banks have tried blockchain, but it didn’t go well.”

The chairman of the central bank has stated that the initiative will not make use of blockchain technology. The central bank will own and operate a payment and settlement system for the CBDC.

Banks will act as intermediaries for a wholesale CBDC, which will be the primary emphasis of the BSP on Disintermediation and bank runs during times of financial stress and the further amplification of the central bank’s footprint are some of the potential issues the central bank is concerned about regarding the retail CBDC.

Remolona explained citing Sweden and China as examples of countries working on producing CBDCs as a digital supplement to currency and “rival cryptocurrencies.” He believes that the Philippines is capable of emulating their experience.

“The decision is to limit it to wholesale — banks will be the only counterparties and then, retail will ride on them.”

The official stated that the CBDC “would happen” during his tenure as governor. In response to the questions posed by the journalist, he indicated that it may take place over the next two years.

Regarding the cryptocurrency industry, Philippines takes a firm stance protecting the domestic market from the presence of international competitors. The Securities and Exchange Commission (SEC) of the Philippines reaffirmed its prohibition on Binance in December 2023.

This was because the exchange was engaging in unregistered activities within the country. Despite the numerous warnings Binance remains one of the most prominent cryptocurrency trading platforms in the Philippines. On social media, several customers have described the local services that Binance provides as “reliable and stable.”

SEC Chair Kelvin Lee, in response to the public criticism and the arguments on the cost attractiveness of Binance for local investors, pointed out the factors of compliance expenses dodged by Binance and urged the investors to choose one of the 17 registered virtual asset service providers.